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Posted on Thu, Dec 27, 2012 : 5:58 a.m.

Internships at startup companies offer mentorship from CEOs and less formality than corporate jobs

By Ben Freed

While it might not have the same prestige as interning at one of the “Big Four” accounting firms or Detroit’s “Big Three” automakers, some college students are choosing to pursue internships at small startup companies instead.

The only “big three” that University of Michigan sophomore Brittany Schulte sees at her internship are the three people who work for the company.

While traditional internships are often found through career fairs like this one at Grand Valley State University, interns at startups often find their positions through word of mouth or a chance meeting with a founder or CEO.

Rex Larsen | Grand Rapids Press

“It’s definitely different,” she said.

“I actually feel like I’m doing something and I’m part of the business instead of just another intern.”

Schulte recently started her internship at M Prep, an Ann Arbor-based startup offering preparatory assistance to pre-medical school students.

“Right now I’m working a lot with the social media aspects at the company,” she said.

“In fact I just posted the Facebook and Twitter blasts of the day out to all of our followers.”

While there is a wide variety of pay level for internships, those who choose to work for startups do so knowing that money is tight and that their primary compensation will be in the experiences they gain.

“I wanted to feel like the work I was doing was actually meaningful,” Schulte, who is not being paid for the internship, said.

“I can talk to the creators of the business, the owners, and feel like what I’m doing is important and that they’re really listening to what I’m saying.”

Co-founder Alec Lee said that having an intern is invaluable for the company because it couldn’t currently afford to bring on another full-time employee.

Editor's note

As Michigan’s economy continues to rebound, internships are proving to be a key way for students to prepare themselves for the job market and for employers to develop a pipeline of talent.
From Dec. 24-30, MLive.com and AnnArbor.com will publish articles on internships at major employers, initiatives by economic development groups, and a survey of what employers are looking for in interns. This is a topic that reporters will be revisiting throughout the year.
Find full coverage here.

“I want to build into our relationship that as we grow over the next four months we can transition her to a role where she is compensated the way she should be for the work she’s doing,” he said.

“It just didn’t make financial sense to add another person to our payroll right now.”

Inner Circle Media co-founder Carrie Hensel’s company is a small marketing firm at only seven full-time employees. Hensel said she looks for interns who are self-motivated.
“I tell them that if they think they’ll come in and I’ll manage them every day, they have the wrong idea,” she said.

“They’re going to come in and participate with our team and learn from all of us. We also expect that they’ll teach us a thing or two and have some ideas for things we can do better.”

Caroline Dobbins interned for Hensel the past two summers and said the opportunity to work closely with the firm’s founders helped draw her to the company.

“I wasn’t interested in interning for the big marketing or branding firms,” she said.

“With my personality I knew it was important for me to have a smaller environment and consistent contact with my mentors.”

Dobbins said her experience at Inner Circle Media was different and more impactful than many of her friends who interned at large corporations.

“A lot of it had to do with the trust I felt like they put in me,” she said.

“She told me to feel free to ask questions but that I’d have to figure things out for myself as well. It was a very comforting message that she trusted me enough for me to figure things out and make my own decisions.”

In addition to trust, both Dobbins and Schulte said the lack of bureaucracy and strict hierarchy allowed them to build stronger relationships with the companies' founders.

“During the first few meetings we were exchanging emails and he [Lee] asked me if it was OK for him to just say ‘hey, what’s up?’” Schulte said.

“It’s very informal, I don’t have to call anyone sir.”

Hensel said that informality is not just a part of the internship, but a crucial part of what it means to work in a smaller company.

“It’s a team of seven where everyone pulls their weight and if they don’t the team feels it,” she said. “But we certainly have a good time, both after work and in the office.”

Dobbins considered taking an offer from Inner Circle Media for a full-time position after graduating from Albion College. Instead, she is currently in the middle of a one-year revitalization fellowship in Detroit.

“I can’t quite get out of the small business realm though,” she said. “I’m working for a tech startup in Detroit while I’m doing the fellowship.”

Comments

Alec

Thu, Feb 28, 2013 : 9:23 p.m.

I figure I may as well respond to these allegations that we are exploiting our interns.
The conditions justifying the legality of an unpaid internship are (1) interns do not work in the place of paid employees, (2) there is educational value in the internship, and (3) that the work does not derive &quot;immediate&quot; benefit for the employer.
(1) Our interns work from home or wherever they wish. They do not have set hours nor do we breathe down their necks for the quantity of work they do. They are free to quit with no negative repercussions except the loss of continued educational value to themselves. Moreover, if they were to quit, they would not be replaced with any employees (the work would very likely go undone - see #3)
(2) There is functionally no difference between the guidance we give our interns and the guidance an instructor would give in an academic setting. All work done by our interns comes directly through us and we give direct feedback on all of it to make sure our interns develop themselves.
(3) Intern work is not directly involved with our primary business activities. Interns do not do sales, marketing, or product development. Their work is primarily research based which will (hopefully) have future, indirect benefits to the company. This is not at all to say that the work done is not valuable; rather, its focus is not on immediate benefit but longer-term growth. If and when their positions evolve, so will the terms of compensation.

Alec

Thu, Feb 28, 2013 : 9:33 p.m.

Moreover, let's look at the hypocrisy of these allegations. Are there individuals unfairly doing unpaid (or even underpaid) work while their employers take fat checks and drive nice cars? Absolutely. Is that always the case anytime there is an unpaid internship? Absolutely not.
Does nobody find it ironic that the University of Michigan can hold a senior design class where students work on projects for professors which turn into products owned and licensed by the university for profit? To boot, the university will charge these students tuition to have the experience while the university reaps the rewards. It seems to me that, in an absurd twist, if companies charged students money for the opportunity to intern, that this would then be defensible.
There are plenty of instances where &quot;work&quot; is being done and is not compensated with cash. The benefits derived by companies are no more or less tangible than the employment opportunities afforded to interns after their internship. The people who work with us gain valuable experience and feedback that will improve their employment prospects down the road. The bottom line is that this is that both parties derive benefit and cash is not (and should not be) the only metric of fairness. I would never ask my interns or employees to pay me to spend time and energy writing a stellar letter of recommendation, but they can be sure they're going to get one when it comes time for them to move on to bigger and better things.

Carrie Hensel

Wed, Jan 2, 2013 : 3:30 p.m.

Please note - we ALWAYS pay our interns. Caroline Dobbins was paid for her time with us, and she was well worth the investment.

nickcarraweigh

Thu, Dec 27, 2012 : 9:50 p.m.

So you sink four years of your life and maybe $50,000-plus into student loans for a college degree. Now, while you do that, you also win the right to work for free for people who are actually making money from what you do. What a country.

Patricia Lesko

Thu, Dec 27, 2012 : 9:22 p.m.

Charlie Rose just settled a lawsuit filed by a group of former &quot;interns&quot; over an unpaid internship. While it might be nice for a start-up to benefit from free labor, &quot;access&quot; to a CEO and the other &quot;perks&quot; listed herein ignore the abuse of interns. Many internships violate minimum wage laws, and officials in states such as California and Oregon are actively investigating companies and fining employers.
The New York Times (http://www.nytimes.com/2010/04/03/business/03intern.html?pagewanted=all) interviewed an official from the Labor Department who explained; &quot;If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,&quot; said Nancy J. Leppink, the acting director of the department's wage and hour division.
If the companies mentioned by the reporter in this piece adhere to Labor Department rules, this piece should be expanded to indicate that. If not, the piece should accurately report the facts concerning pay and interns, and the fact that the companies may be breaking the law.

Angry Moderate

Fri, Dec 28, 2012 : 5:58 a.m.

Unfortunately, the government itself is taking advantage of the unpaid internship scam. The Department of Justice &quot;hires&quot; lawyers (so 7 years of higher education and 6-figure debt) to work as assistant prosecutors for a whole year for free.

Nicholas Urfe

Thu, Dec 27, 2012 : 3:13 p.m.

Founders with adequate ability, experience and connections should be able to get the tiny amount of funding necessary to pay interns. If they are &quot;all that&quot;, then they can pay. Otherwise they aren't.
If they can't pay you enough to cover gas and ramen, look elsewhere.
Remember the Seinfeld episode with Kramer's intern and the chicken?